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Letting agents are great in that they manage the trickier and lengthier aspects of tenancies which landlords typically dislike. With that said, finding one which best suits you and your needs can be tricky, CIA Landlord Insurance has put together a handy guide which may assist in laying out the basics.

Who is likely to benefit from using a letting agent?

Typically, landlords who benefit from the use of a letting agent are those who have a large number of properties to manage. Also, landlords do not always live close to the property they are renting out, so a letting agent close to the property may prove wise in order to keep tabs on their tenancies.

Letting agents work well for inexperienced landlords, where they can be utilised for some added security and support. It is highly important landlords are up to date on relevant regulations and legislation, therefore if you are not or you do not feel comfortable in this department, it is most-definitely worthwhile using a letting agent.

What services do letting agents provide?

There are varying levels of service which letting agents provide, from a ‘let-only or ‘tenant-find’ service for example, through to the more comprehensive ‘fully managed’ service.

A ‘let-only’ and ‘full management’ service are typically the two main categories which a letting agent will provide.

A ‘let-only’ and ‘full management’ service are typically the two main categories which a letting agent will provide.

With a ‘let-only’ service, the letting agent takes responsibility for things such as providing rental assessments to give you a better understanding of what you can realistically charge, conduct viewings on your behalf and acquire references from tenants. What can also be expected from this level of service is a tenancy agreement to be provided, credit checks performed and the tenants first payment be taken by them.

A full management service, on the other hand, will incorporate all of the aforementioned elements but you can expect the letting agent to take responsibility for the day-to-day management, too. If for instance, a tenant locks themselves out of the property or there is a boiler fault, the letting agent will arrange for one of its approved contractors to resolve the issue.

What is the cost of a letting agent?

The cost of a letting agent greatly differs depending on factors such as the location and size of your property. As it is a highly competitive market, there is always the prospect of negotiation to get yourself a better deal, so long as you are prepared to haggle. Request a price from a number of sources in your locality, and begin negotiations from there.

If a small independent letting agent is hired, then for a ‘let-only’ service you may be fortunate enough to pay as little as a couple of hundred pounds for the service. However, the likelihood is you will pay the equivalent to a months rent + an annual tenancy renewal fee.

It is important to note, from June 1st 2019 landlords or letting agents are no longer able to charge these fees to tenants. This means that (some) letting agents have been offsetting this loss onto the landlords (therefore paying double what would originally be paid for the renewal fees).

A full management service will typically be a 12-month deal with fees starting at around 12% and can rise to as much as 20% depending on location. If you come across prices lower than this, it may be wise to avoid them for reasons of service quality.

A full management service will typically be a 12-month deal with fees starting at around 12% and can rise to as much as 20% depending on location. If you come across prices lower than this, it may be wise to avoid them for reasons of service quality.

Should I use a letting agent?

With a wealth of information at our fingertips, it may seem lucrative to consider a ‘DIY’ approach for conducting a letting agent’s traditional duties. With plenty of research, it is possible you can do it yourself. Only go down this road if you feel confident in yourself to abide by the relevant regulations and legislation.

One thing to consider if you do decide to use a letting agent, check to see if they are registered with an industry body or trade association. These include the Association of Residential Letting Agents (ARLA), National Approved Lettings Scheme (NALS) and UK Association of Accredited Letting Agents (UKALA) as the main bodies whereby the letting agents have to adhere to certain standards in order to become a member.

The idea of being a landlord is great, but the reality, for the most part, is it is not an easy task. Taking control of all of your own property management may prove extremely difficult depending on the size and number of property’s you own, and the nature of your tenants. You may have the best intentions of delivering everything all of your tenants require but sometimes this may not end up as being the case. If dealing with unhappy tenants is your idea of a nightmare, letting agents will do this for you.

In accordance with your own circumstances and requirements, only you as a landlord can make the decision but by keeping yourself well informed on all aspects discussed in this guide, to begin with, you can improve your chances of making the best possible choice for you.

New research among 2,000 UK adults commissioned by virtual letting agency LetBritain has revealed a mass consumer exodus from offline businesses, finding:

UK adults are turning en masse to online platforms, frustrated by the archaic and out-dated processes used by offline businesses, new research by LetBritain reveals.

An independent, nationally-representative survey of 2,000 UK adults commissioned by virtual letting agency LetBritain has revealed mass consumer discontent with businesses failing to embrace digital disruption, with over half (51%) regularly going online to buy the vast majority of products and services they use. What’s more, 45% favour online services over ones that require them to go into a physical premise, and 29% actively avoid those businesses that do not offer an online service. People in the capital are the most technologically demanding, with 62% of Londoners opting for online solutions and half (51%) consciously avoiding businesses that do not offer online services.

Across UK industries, the rise of digital solutions is enhancing the accessibility, transparency and quality of services available to consumers. In response, the majority of UK society (57%) believes that businesses without an online presence or that require a significant amount of offline communication will be replaced by online-only or app-based alternatives within the next 10 years – equating to nearly 30 million UK adults. This number rises to three in four in the capital.

In light of this, LetBritain’s research found consumer dissatisfaction was particularly prevalent in the letting market, with both renters and landlords voicing their strong discontent at the lack of quick, accessible and easy online services available to those seeking to rent a property. With the annual rate of rental growth recently doubling in the UK, 31% of adults think that using high-street letting agents to rent out a property is outdated and overly-burdened by reams of paperwork.

In response to these widespread frustrations, one in four (25%) UK adults prefer to use online-only services such as Gumtree or Spareroom.com to source and secure a property, with 32% not having the time to use services or undertake transactions that require them to visit physical premises. This trend was particularly pertinent for Londoners – half of people (50%) in the capital rely on online services only when looking for a room or property to rent, with 55% not having the time to physically visit a property or office to undertake or complete a transaction.

Fareed Nabir, CEO of LetBritain, commented on the findings: “Over the past decade, online solutions have drastically transformed the way we  conduct business. Today’s research clearly shows that consumers not only expect but now demand that companies provide their services online. And on that point, the rental market is clearly falling short, with too many high-street real estate agents failing to embrace digital solutions, relying on cumbersome offline processes. For businesses in the rental market, the choice is simple – integrate and embrace online solutions or run the risk of being outpaced by changing consumer demand.”

(Source: LetBritain)

UK adults are turning en masse to online platforms, frustrated by the archaic and out-dated processes used by offline businesses.

An independent, nationally-representative survey of 2,000 UK adults commissioned by virtual letting agency LetBritain has revealed mass consumer discontent with businesses failing to embrace digital disruption, with over half (51%) regularly going online to buy the vast majority of products and services they use. What’s more, 45% favour online services over ones that require them to go into a physical premise, and 29% actively avoid those businesses that do not offer an online service. People in the capital are the most technologically demanding, with 62% of Londoners opting for online solutions and half (51%) consciously avoiding businesses that do not offer online services.

Across UK industries, the rise of digital solutions is enhancing the accessibility, transparency and quality of services available to consumers. In response, the majority of UK society (57%) believes that businesses without an online presence or that require a significant amount of offline communication will be replaced by online-only or app-based alternatives within the next 10 years – equating to nearly 30 million UK adults. This number rises to three in four in the capital.

In light of this, LetBritain’s research found consumer dissatisfaction was particularly prevalent in the letting market, with both renters and landlords voicing their strong discontent at the lack of quick, accessible and easy online services available to those seeking to rent a property. With the annual rate of rental growth recently doubling in the UK, 31% of adults think that using high-street letting agents to rent out a property is outdated and overly-burdened by reams of paperwork.

In response to these widespread frustrations, one in four (25%) UK adults prefer to use online-only services such as Gumtree or Spareroom.com to source and secure a property, with 32% not having the time to use services or undertake transactions that require them to visit physical premises. This trend was particularly pertinent for Londoners – half of people (50%) in the capital rely on online services only when looking for a room or property to rent, with 55% not having the time to physically visit a property or office to undertake or complete a transaction.

Fareed Nabir, CEO of LetBritain, commented on the findings: “Over the past decade, online solutions have drastically transformed the way we  conduct business. Today’s research clearly shows that consumers not only expect but now demand that companies provide their services online. And on that point, the rental market is clearly falling short, with too many high-street real estate agents failing to embrace digital solutions, relying on cumbersome offline processes. For businesses in the rental market, the choice is simple – integrate and embrace online solutions or run the risk of being outpaced by changing consumer demand.”

(Source: Let Britain)

With an ever-growing need for property, renting in the UK has become go-to game for many home seekers who can’t quite make it into the mortgage market. But what does this mean for the letting side of property? Fareed Nabir, CEO of PropTech platform LetBritain discusses for Finance Monthly.

Over recent weeks we have seen the UK’s two largest political forces host their party conferences. Along with inevitable, frequent mentions of Brexit and a fair amount of scrutiny for both the Labour and Conservative leaders, it also became clear that access to housing is at the top of Westminster’s agenda at present. In this respect, the private rental sector faces particular challenges in providing homes for a growing proportion of the country’s rising population. With the UK population projected to reach 70 million people by mid-2027, PWC estimates that an additional 1.8 million households will enter the UK’s private rental sector over the next eight years.

Central to the growing importance of the private lettings sector is the rising costs associated with purchasing a home. The average value of properties in London has risen by a whopping 78% in the ten years since the onset of the 2007 global financial crisis. Add to this further figures around rising prices for Manchester, the East Midlands and Scotland and a clear picture emerges. Whilst the UK property market may be a fruitful asset class for many investors, more and more UK residents are now coming to rely on the private rental sector as the bottom of the ladder rises out of their reach.

Recognising the value of renting

Reacting to the rising number of people moving out of homeownership, leading political figures have focused on addressing feelings of insecurity expressed by voters. Both the Conservative and Labour parties share a target of building one million new homes by the end of the parliament and are considering the possibility for longer tenancies to become the norm. Labour has taken this one step further and has embraced a policy pursued in cities including Berlin, Stockholm and New York, whereby the government intervenes in various ways to restrict rents.

However, we must also remember that for many people, renting is an extremely attractive option. One of the most attractive aspects of renting is the greater flexibility offered by tenancies relative to ownership. For example, if you have to move to a new city for work, it’s nowhere near as difficult as having to list a property and wait for a sale to be processed. With the UK workforce now more globally and nationally mobile than ever before, we must remember the historic advantages of renting if we are to effectively adapt. The reasons that made renting an attractive option in the past haven’t gone away; in fact they are now truer for more people than ever.

To this end, the emergence of a rising number of tech platforms within the property sector holds significant promise. A property market that was once dependent on bricks and mortar agencies, endless reams of paperwork, lengthy phone calls and poor transparency is fast becoming more efficient; as a result both landlords and tenants are coming to expect more. It’s now possible to begin the process of securing a rental property from anywhere in the world and engage directly with a landlord or their instructed letting agent.

In short, tech has meant that the process of letting a property can be made quicker, cheaper and more transparent for all involved. Commonplace in other aspects of people professional and personal lives, people in the UK today expect tech – everything from bespoke software and apps to slick online platforms and web support – to make hitherto laborious processes far, far easier.

Delivering choice and security

Recent LetBritain research into this emerging development found that 31% of UK adults, the equivalent of 15.92 million people, now think that using high street letting agents to rent out a property is outdated and overburdened by paperwork. A further 25% were found to be relying upon unregulated online-only alternatives to source and secure a rental property. Whilst a number of challenges remain in managing this transition, the scale of public sentiment is resoundingly favourable towards harnessing the power of tech to more conveniently and efficiently facilitate property rentals.

The challenge remains for the sector to deliver choice and security across the letting market. Landlords should not feel the need to put their property at risk by renting to an unreferenced tenant just because they were sourced online, and tenants deserve to know that their legal rights will be observed. If this is achieved, the private rental sector should be able to manage the demand that it’s set to face in the years ahead, with landlords and tenants alike incentivised to be communicative, transparent and forthcoming with all necessary documentation.

As more of us move around or find it difficult to buy in our desired location, digital solutions that enhance and protect the interests of landlords and renters are vital. So while political leaders are focusing heavily on turning Generation Rent into Generation Buy, it is equally important that they promote more progressive approaches for serving all those in the rental market.

Wayne Beecham, Director of Progressive Property, the UK's biggest property education and investment company below gives Finance Monthly his reaction to the Queen’s speech’ plans to ban landlord’s charging letting fees.

"Following the Queen’s speech we once again receive confirmation that a tenancy fee cap/ban is on the cards in the future, this has been a headline subject in the industry and I have heard many landlords, property professionals and property companies/ agencies groan at the thought of an outright ban on fees, in many ways I agree as an out-right ban tends to undermine the work and effort put into to the processes of renting properties and the hard work applied by a good quality agent who understands the importance of these fees to support the work required for a harmonious tenancy cycle. Though many people forget that the lettings industry has continued to fall short when it comes to regulations and change over the time and in some ways the landslide of changes we have been encountering over the last 10 - 15 years has been a result of the industry trying to catch up with the limited changes and regulations applied to the private rental sector and we should see these changes as a positive step forward to a better regulated, safer and fairer industry for all involved.

"I agree that an outright ban would not be a positive move forward for the industry and will encourage more agents and landlords to cut corners to try and achieve the outcome they require, a simple fee cap would be adequate to ensure consistency and fairness across the industry as well as acknowledging the works required to protect all parties in the private rental sector. Following conversations with referencing agencies a fee ban would merely promote more creative strategies to be implemented to the industry which would fundamentally cost tenants more money and completely undermine the purpose of a fee ban, as referencing agencies may look to increase their fees to tenants who require referencing for the purpose of renting a property and look to share this fee with letting agents the tenants will ultimately end up paying more to support essentially two fees. I agree any good agent is happy to promote more regulations within the industry which would ensure less bad practices and unscrupulous landlords who look to cut corners and potentially risk lives for their own personal gain, but we also need to ensure we are promoting becoming a property investor to ensure supply of good quality properties continues into the market place to keep up with demand and the shortage of housing we currently face.

"We have already seen a number of regulation changes which have failed to live up to their original objectives, this is clearly seen in the introduction of the protection of deposits and the choice of two different schemes. One scheme has met the objectives set and has a positive impact on the sector by holding the funds and therefore ensuring the purpose of the scheme to protect the tenants monies from any wrong doing or foul play, whilst the other has made little change and following personal experiences of bad practice by an agent the tenants and there deposits which were meant to be safeguarded where unfortunately left in the same situation they would have been if the scheme did not exist at all. We have also seen this with local councils and the eviction process as councils now inform tenants to stay even when legal notices have been served and even worse after county courts have instructed the tenants to leave, this short sighted advice has left many tenants in an even worse situation and delayed the inevitable outcome that they require alternative accommodations, following this advice they are now left in emergency housing or a hostel with a CCJ against their name and therefore narrowing their options for housing going forward and in many cases leaving them with the option of council housing which is already in short supply. By introducing a fee structure within the industry we would ensure consistency and transparency and therefore achieving the outcome required, if any agent or landlord was seen to be ignoring this structure a simple fine process would be enough discouragement."

In addition, Finance Monthly heard from Adrian McClinton, Associate Solictor at law firm Coffin Mew, on the Tenant's Fees Bill:

"Will the banning of letting agent’s fees help tenants?  In my view probably not as much as hoped. 

“Many of those renting do not want to be renting, but they cannot afford to buy because properties where people want/need to live are too expensive.  On the flipside, landlords have seen their margins fall and therefore will understandably want to maintain already slim margins whilst still using the valuable services of letting agents.  We have also seen an increase in competition within the letting agent market, recently joined by online providers.

“I think that landlords will stand firm and we will see the cost of this proposed ban being partly shouldered by letting agents, by reducing their prices and internal cost cutting, and by tenants, through an increase in rents, which is possible because of the huge demand for housing.”

With the changes to mortgage interest relief for buy-to-let landlords, many are now considering transferring their properties and are actively looking at ways to reduce their tax burden.

Below, Jonathan Amponsah of The Tax Guys looks at the pros of cons of establishing a buy-to-let business as a limited company and the tax implications you need to be aware of.

Tax rules for buy-to-let (BTL) landlords are changing – and this could mean higher tax bills.

Landlords will no longer be able to deduct all of their finance costs from their property income. The changes are being phased in between April 2017 and 2020.

However, this change doesn‘t apply to limited companies. So, unsurprisingly many BTL landlords are considering transferring their properties into a limited company, enabling them to continue to claim tax relief on all the interest and finance costs.

On the surface this decision appears to make business and financial sense. But… you may find yourself landed with unnecessary tax bills and costs.

Here are five common pitfalls to be aware of:

These two main tax pitfalls could potentially wipe out any short term tax savings.

But there are some situations where you can reduce or eliminate the pitfalls above and enjoy some of the benefits of holding your properties through a limited company.

Clearly the message here is; don’t rush into it. It’s extremely unwise to move BTL properties into a company without taking professional advice. Whilst there’s no simple answer to the question and it all depends on your circumstances, as a general ‘rule of thumb’ I would say that if it‘s only one or two existing properties in your name, it‘s not a good idea. If you‘ve got 6-10 properties, it‘ might be worth your while to look at how you can enjoy the benefits of a limited company without triggering unnecssary taxes and costs.

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